exv10w1



 





Exhibit 10.1




AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND WAIVER OF

DEFAULTS




     This Amendment, effective as of November 17, 2003, is made by and between
SCHUFF INTERNATIONAL INC., a Delaware corporation and the other Persons listed
in Schedule 1.1 (collectively, the “Borrower”), and WELLS FARGO CREDIT, INC., a
Minnesota corporation (the “Lender”).



RECITALS




     The Borrower and the Lender are parties to a Credit and Security Agreement
dated as of August 13, 2003, as supplemented by a Post-Closing Items Agreement
of that same date (as supplemented, the “Credit Agreement”). Capitalized terms
used in these recitals have the meanings given to them in the Credit Agreement
unless otherwise specified.



     The Borrower has requested that certain amendments be made to the Credit
Agreement and that waivers of certain Events of Default be granted, which the
Lender is willing to make and grant pursuant to the terms and conditions set
forth herein.



     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:



     1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein.



     2. Amendments to Credit Agreement. Notwithstanding anything in Section
6.2(b) of the Credit Agreement to the contrary; the minimum Book Net Worth
which the Borrower must achieve, determined as of October 31, 2003, November
30, 2003 and December 31, 2003, shall be $10,000,000.



     3. No Other Changes. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.



     4. Waiver of Defaults. The Borrower is known to be in default of the
provisions of the Credit Agreement described in Exhibit A to this Amendment
(collectively, the “Known Existing Defaults”). The Lender waives the Known
Existing Defaults upon the terms and subject to the conditions of this
Amendment. This waiver shall be effective only in this specific instance and
for the specific purpose for which it is given, and this waiver shall not
entitle the Borrower to any other or further waiver in any similar or other
circumstance or be deemed to constitute a custom or course of dealing between
the Borrower and the Lender.



 









 





     5. Fee. The Borrower shall pay the Lender a fully earned, non-refundable
fee in the amount of $25,000 in consideration of the Lender’s execution and
delivery of this Amendment.



     6. Conditions Precedent. This Amendment, and the waiver set forth in
Paragraph 4 hereof, shall be effective when the Lender shall have received an
executed original hereof, together with each of the following, each in
substance and form acceptable to the Lender in its sole discretion:



         (a) The Acknowledgment and Agreement of Guarantors set forth at the end of
this Amendment, duly executed by each Guarantor.



         (b) Payment of the fee described in paragraph 5.



         (c) Such other matters as the Lender may require.



     7. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:



         (a) The Borrower has all requisite power and authority to execute this
Amendment and to perform all of its obligations hereunder, and this Amendment
has been duly executed and delivered by the Borrower and constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance with
its terms.



         (b) The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate action and do
not (i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Borrower, or the articles of incorporation or by-laws of the Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected.



         (c) All of the representations and warranties contained in Article V of
the Credit Agreement are correct on and as of the date hereof as though made on
and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.



     8. References. All references in the Credit Agreement to “this Agreement”
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be
deemed to refer to the Credit Agreement as amended hereby.



     9. No Other Waiver. Except as set forth in paragraph 4 hereof, the
execution of this Amendment and acceptance of any documents related hereto
shall not be deemed to be a waiver of any Default or Event of Default under the
Credit Agreement or breach, default or event of default under any Security
Document or other document held by the Lender, whether or not known to the
Lender and whether or not existing on the date of this Amendment.



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     10. Release. The Borrower, and each Guarantor by signing the
Acknowledgment and Agreement of Guarantors set forth below, each hereby
absolutely and unconditionally releases and forever discharges the Lender, and
any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing, from any and all claims, demands or causes
of action of any kind, nature or description, whether arising in law or equity
or upon contract or tort or under any state or federal law or otherwise, which
the Borrower or such Guarantor has had, now has or has made claim to have
against any such person for or by reason of any act, omission, matter, cause or
thing whatsoever arising from the beginning of time to and including the date
of this Amendment, whether such claims, demands and causes of action are
matured or unmatured or known or unknown.



     11. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation
of this Amendment and the documents and instruments incidental hereto. The
Borrower hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses and the fee required under paragraph 5 hereof.



     12. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantors may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.



	 	 	 	 	 	 	 
	 	 	 	 	SCHUFF INTERNATIONAL, INC., a
	WELLS FARGO CREDIT, INC.	 	Delaware corporation
	 
	 	 	 	 	 	 
	By

	 	/s/ Joseph A. Lisack	 	By	 	/s/ Scott A. Schuff
	

	 	

	 	 	 	

	Print Name Joseph A. Lisack	 	 	 	Scott A. Schuff
	Its Assistant Vice President	 	 	 	Its President







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	 	 	SCHUFF STEEL COMPANY, a
	 	 	Delaware corporation
	 
	 	 	 	 
	

	 	By	 	/s/ Scott A. Schuff
	

	 	 	 	

	

	 	 	 	Scott A. Schuff
	

	 	 	 	Its President
	 
	 	 	 	 
	

	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	

	

	 	 	 	Michael R. Hill
	

	 	 	 	Its: Vice President and CFO
	 
	 	 	 	 
	 	 	BANNISTER STEEL, INC., a California
	 	 	corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	

	

	 	 	 	Scott A. Schuff
	

	 	 	 	Its: Vice President
	 
	 	 	 	 
	 	 	ADDISON STEEL, INC., a Florida
	 	 	corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	

	

	 	 	 	Scott A. Schuff
	

	 	 	 	Its: Vice President
	 
	 	 	 	 
	 	 	QUINCY JOIST COMPANY, a Delaware
	 	 	corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	

	

	 	 	 	Scott A. Schuff
	

	 	 	 	Its: Vice President







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	 	 	SIX INDUSTRIES, INC., a Delaware
	 	 	corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	

	

	 	 	 	Scott A. Schuff
	

	 	 	 	Its: Vice President
	 
	 	 	 	 
	 	 	ON-TIME STEEL MANAGEMENT
	 	 	HOLDING, INC., a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	

	

	 	 	 	Michael R. Hill
	

	 	 	 	Its: Secretary and Treasurer







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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS




     The undersigned, each a guarantor of the indebtedness of Schuff
International, Inc. (the “Borrower”) to Wells Fargo Business Credit, Inc. (the
“Lender”) pursuant to a separate Guaranty dated as of August 13, 2003 (each, a
“Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in
paragraph 10 of the Amendment) and execution thereof; (iii) reaffirms his or
its obligations to the Lender pursuant to the terms of his or its Guaranty; and
(iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Credit Agreement and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the liability of the undersigned under his or its
Guaranty for all of the Borrower’s present and future indebtedness to the
Lender.



	 	 	 	 	 
	 	 	ON-TIME STEEL MANAGEMENT, INC., a Delaware
	 	 	corporation
	 
	 	 	 	 
	

	 	By:	 	/s/ Daniel T. Kneifl
	

	 	 	 	

	

	 	 	 	Daniel T. Kneifl, President
	 
	 	 	 	 
	 	 	ON-TIME STEEL MANAGEMENT – NORTHWEST
	 	 	L.L.C., a Delaware limited liability
	 	 	company
	 
	 	 	 	 
	

	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	

	

	 	 	 	Michael R. Hill, Manager
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott Sherman
	

	 	 	 	

	

	 	 	 	Scott Sherman, Manager
	 
	 	 	 	 
	 	 	ON-TIME STEEL MANAGEMENT – COLORADO 
	 	 	L.L.C., a Delaware limited liability company
	 
	 	 	 	 
	

	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	

	

	 	 	 	Michael R. Hill, Manager
	 
	 	 	 	 
	

	 	By:	 	/s/ Scott Sherman
	

	 	 	 	

	

	 	 	 	Scott Sherman, Manager

















 






EXHIBIT A




Existing Defaults




     The Borrower is in default of the following provisions of the Credit
Agreement (collectively, the “Known Existing Defaults”):



     (i) the Book Net Worth of Borrower as of August 31, 2003 was $12,225,301,
which was less than the Book Net Worth of $12,500,000 required under Section
6.2(b) of the Credit Agreement;



     (ii) the Book Net Worth of Borrower as of September 30, 2003 was
$10,743,492, which was less than the Book Net Worth of $12,500,000 required
under Section 6.2(b) of the Credit Agreement;



     (iii) the actual Net Loss of Borrower for July 2003 was $899,486, which
exceeded the maximum Net Loss of $500,000 permitted for such month under
Section 6.2(c) of the Credit Agreement;



     (iv) the actual Net Loss of Borrower for the two month period ending July
31, 2003 was $1,512,925, which exceeded the maximum Net Loss of $1,000,000
permitted for such period under Section 6.2(c) of the Credit Agreement;



     (v) the actual Net Loss of Borrower for the two month period ending August
31, 2003 was $1,206,330, which exceeded the maximum Net Loss of $1,000,000
permitted for such period
under Section 6.2(c) of the Credit Agreement;



     (vi) the actual Debt Service Coverage Ratio for the month of September
2003 was .62, which was under the minimum Debt Service Coverage Ratio of .70
permitted for such period under Section 6.2(a) of the Credit Agreement;



     (vii) the actual Net Loss of Borrower for September 2003 was $1,481,809,
which exceeded the maximum Net Loss of $500,000 permitted for such month under
Section 6.2(c) of the Credit Agreement; and



     (viii) the actual Net Loss of Borrower for the two month period ending
September 30, 2003 was $1,788,653, which exceeded the maximum Net Loss of
$1,000,000 permitted for such period under Section 6.2(c) of the Credit
Agreement.



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SCHEDULE 1.1




Schuff International, Inc., a Delaware corporation

Schuff Steel Company, a Delaware corporation

Bannister Steel, Inc., a California corporation

Addison Steel, Inc, a Florida corporation

Quincy Joist Company, a Delaware corporation

Six Industries, Inc., a Delaware corporation

On-Time Steel Management Holding, Inc., a Delaware corporation